Office of Regulations and Interpretations

Employee Benefits Security Administration

U.S. Department of Labor

Attn: Conflict of Interest Rule, Room N-5655

200 Constitution Avenue, NW

Washington, D.C. 20210

RE: Conflicts of Interest Rule, RIN 1210-AB32

Dear Department of Labor officials:

As an independent financial advisor, I greatly support the Department of Labor`s (Department) goal of 

investor protection in the retirement savings marketplace. Unfortunately, the Department`s proposed 

`conflict of interest` rule (Proposal) attempts to achieve this goal in the wrong manner. If the Proposal is 

not substantively changed, it will end up hurting my clients and my small business. Therefore, I appreciate 

this opportunity to submit comments to the Department and hope that they are helpful in crafting a 

regulation that achieves the goals of investor protection without hurting investors of modest means or the 

small businesses, like mine, that provide these investors with high-quality retirement services. 

I support a carefully-crafted, universal fiduciary standard that would be applicable to all professionals 

providing personalized investment advice to retail clients. This standard should apply to all products and 

account classes, and should be written in such a manner to preserve current business models within the 

financial services industry. Such a uniform standard of care should consist of three main points. First, a 

professional advisor should ensure that the interests of the customer come first, and any remaining 

conflicts must be knowingly consented to by the customer. Second, he or she should provide advice with 

skill, care, and diligence based upon information that is known, or should be known, about the customer`s 

investment objectives, risk tolerance, financial situation, and other needs. Lastly, an advisor should 

disclose material conflicts of interest, avoid them when possible, and obtain informed customer consent to 

act when such conflicts cannot be reasonably avoided.

While the Department has proposed a standard of care that is similar in principle, the Proposal would only 

apply to retirement savings products. This would leave advisors, such as me, working under a variety of 

standards depending upon our registration status (investment adviser or broker-dealer) and the account 

type (retirement or non-retirement). I believe this will lead to confusion amongst the clients that we serve. 

It is because of this that I believe it is critical that any standard of care be proposed in close coordination 

with the securities regulators. This would allow for us, the advisors, to work effectively under one standard 

that we could easily explain to our clients.

In addition, the Proposal includes a variety of provisions that will make it harder for my clients and other 

retirees to obtain access to the advice that they so desperately need to secure a dignified retirement. 

Specifically, I have the following concerns:

1) Financial Advisors are Heavily Regulated: The Proposal appears to be motivated by a mistaken belief 

that financial advisors and the financial industry are inadequately regulated. In truth, my business is 

heavily regulated by multiple regulators, and my broker-dealer routinely monitors my activity and 

examines my business to ensure that I am in compliance with the numerous rules and regulations I am 

subject to as a financial advisor. I am required to follow the rules of the Securities and Exchange 

Commission, the Financial Industry Regulatory Authority, state securities regulators, and may be subject 

to an examination or inspection by these agencies at any time. These regulators, in addition to creating 

and enforcing rules, are also at the front line working to detect illegal activity in the retirement market and 

coordinate with law enforcement to rid the industry of bad actors. This proposal, while intended to bolster 

the existing regulatory framework, will in fact create a more fractured and confusing environment that will 

unnecessarily strain the resources of securities regulators and my broker-dealer`s compliance department 

who are best positioned to detect and remedy regulatory concerns.
2) BICE is Unworkable: While the spirit of the proposed Best Interest Contract Exemption (BICE) may be 

sound, as currently crafted it is largely unworkable for a variety of reasons. I entered the financial services 

profession because I wanted to help people achieve their financial goals. However, I can only operate my 

small business if I can cover my costs. . The proposed BICE requires me to adhere to numerous very 

detailed, costly, and difficult requirements while producing an unprecedented amount of very specific data 

on a point of sale, annual, and continuing basis. It will also subject me to huge liability exposure. The 

Proposal also requires financial services firms to significantly alter the compensation structure of our 

industry. The result is that I will not be able to continue to advise small and mid-size clients who need 

retirement assistance. Without my guidance, I fear that these individuals` retirement security will be 

placed at risk. This is unacceptable in light of the retirement crisis facing our country. In addition these 

concerns, I also want to raise the following issues with the proposed BICE:

 - The requirement that a customer sign the contract `pre-engagement` will create an unnecessary hurdle 

to clients sitting down with a financial advisor and seeking to understand how to prepare for their 

retirement. Although the intended purpose of BICE is to enhance their rights and protections, clients 

seeking advice will be reluctant to sign a contract prior to getting to know whether to work with their 

advisor. Any such contract should be provided and signed at the point of sale.

 - Creates Private Right of Action: I am also concerned with the proposed private right of action that 

would be created under the contract stipulated by BICE. This right was never authorized under ERISA or 

any other related statute. Furthermore, significant federal and state remedies are already available to 

consumers who allege harm by broker-dealers and their advisors.

 - Removes Important Investments from an Advisors Tool Box: I also believe that the Department`s 

decision to ban certain products from the provisions of BICE would in fact prevent advisors from serving 

the best interest of some clients. While concerns regarding price transparency and revenue flows may be 

driving this decision, financial advisors know that not every investor has the same needs and 

circumstances, and being able to provide a wide array of products allows advisors to serve different types 

of clients.

3) Disclosure Approach is Preferable to BICE: The Department appears to have discounted the fact that 

improved disclosures would address many of the concerns that have led to the Proposal. Investors are 

able to make better choices when they are properly informed of the differences between the advice and 

services being offered. In order to provide investors with the information that they need, investors should 

receive concise consolidated disclosure documents written in plain English. These improved disclosures 

would ensure that consumers are better informed without the deep disruptions to the current retirement 

savings marketplace that would cause many retirement savers to lose access to invaluable financial 

advice.

4) Education Carve-Out Changes Will Hurt Retirees: The Proposal`s changes to what is considered 

`investment education` will likely curtail the effectiveness of investor education outreach. The inclusion of 

decumulation in `investment education` is commendable, but the prohibition on using specific investments 

to demonstrate the options available for investors to create an appropriate asset allocation will lead to 

investors having less knowledge regarding their investment options.

5) Grandfathering Provision is Ineffective: Another concern is the Proposal`s `grandfathering provision,` 

which will require that virtually every single account be repapered, or that financial advisors not provide 

further service on their client`s existing retirement accounts. This type of regulation does not serve the 

best interests of investors. Therefore, it needs to be replaced with a more conventional grandfathering 

clause that is tied to the date of purchase, irrespective of continuance of service on the account.

I urge the Department to work with the industry to develop a workable best interest standard that protects 

investors and preserves their access to much needed retirement assistance, products and services.

Sincerely,